I am loyal to several businesses and their products and services. One particular company is Southwest Airlines. Southwest may not be for everyone but I like the ease of the on line booking process, the competitive pricing, the convenience of flying from my home city, the ability to re-book without extra fees and that bags fly free. And if something happens outside of the employees control they recover well. Here is a great example of how the culture of Southwest and their focus on ensuring the best customer experience put this company at the top of my loyalty list.
“This is your pilot. Unfortunately our flight is going to have to divert to Phoenix tonight because fog has closed the San Diego airport and we cannot land.” How many times as business people and/or vacation travelers have we heard those words or something similar on a flight? I have been through this many times in my working career traveling around the world. I have had to deal with weather, mechanical failure, lost baggage, food poisoning, baggage trucks hitting the plane (a story for another blog) or trying to find a place to stay in a strange city or country. You name it, it has happened to me. This time I was with my wife, traveling on vacation. And on a late Saturday night all of the nightmares of previous flight problems came back to me. I was expecting the worst. I wondered what kind of mess are we were going to have to deal with once we got on the ground, and how upset I would be if this was handled poorly (like almost every instance that I had experienced with other airlines). I was getting ready for a fight especially in this environment of too many people, not enough planes, and declining customer service: all driven by a bad economy and companies just not caring about “The Customer.”
When we landed late that night, my expected horror began to abate. Southwest had multiple agents available for rebooking including preparation by their phone representatives to re-book if we wanted to call directly. They had a network of hotels prepared to accommodate us overnight at a low cost and transportation to pick us up at the airport. The next morning when we arrived at Sky Harbor, we were greeted by apologies from airline check in and gate personnel, flight attendants and crews before we landed successfully in San Diego on Sunday. Southwest made what could have been a stressful and time consuming situation into an easy and better than expected experience.
My elation was not yet complete, however. The following day my wife and I received emails from Southwest with their apologies for the weather situation. For our inconvenience they were giving us each $75 vouchers to use on future flights. I was flabbergasted. They went beyond what they had to do and made both of us very loyal customers.
Southwest is by no means the only one out there that gets the “Customer Experience” as part of their business model. Companies like Apple, Google, Amazon, Zappos, Costco, USAA and others embrace this world class customer experience for those who shop for their products and services. I even have some favorite local businesses we could add to the list of “who gets it,” as I like to say.
Why is it that these companies “get” the Customer Experience and others do not? Why is it that some employees seem to care about the company they work for and the customers they serve and others do not? Why do they do it in the first place? What’s the benefit to them, their employees, and their shareholders?
Well, let’s first approach it from a pure economic benefit standpoint. Southwest has had 37 straight years of profitability. 37 years! What other airline has this level of financial results? The answer is none. So for them the customer experience is more than just a cultural thing. It’s a successful economic one and it’s in their DNA. Apple’s revenue, profits and stock price have all risen dramatically due to their focus on the total customer experience over the past decade. Southwest has received both government recognition for lowest number of complaints, ACSI (American Customer Satisfaction Index) best in category customer experience, and numerous awards from publications over many years, and in some cases decades. Many of these companies are also on the list of Best Companies to Work For as measured by their employees (see Fortune’s Best to Work For lists). So the economic, employee, and shareholder results are obvious by whatever measures you want to use.
Why doesn’t everyone do it then if it’s so obvious? Forrester has conducted research and concluded the following obstacles need to be overcome to have dramatic improvement in the Customer Experience:
- Executive involvement
- Clear customer experience strategy
- Customer experience management processes
- Organizational cooperation and involvement at all levels
- Understanding about target customers
- Urgency within the company
I agree with these based upon my business experience and would add some additional ones or prerequisites to this list. Mine would be:
- Siloed responsibility for the customer experience
- Complexity of the products or services
Therefore, the answer is it’s hard to overcome all of the obstacles, but the best have figured out how to do it. In some cases they built “it” in when they stared. Others had to overcome such obstacles and adapt in order to “get it.” For those who have done it successfully, the results are spectacular.
In the end it’s the economics that drive the importance of the customer experience. Watermark Consulting studied the stock performance of “leaders” and “laggards” and determined that from 2007 through 2009, customer experience leader’s cumulative total returns for their stock was 145% better than the laggards. In addition, they determined that even though in 2008 all of the measured companies performance was negative, the leaders’ performance was significantly better than the laggards, -32% versus -49%. So even though customers cut back, they still favored those that do a better job over those that do not. The real proof is in 2009 where the leaders roared back with performance almost SIX times better than the laggards, 59% to 10%.
I will be very interested to see how Southwest performs in its acquisition of AirTran airlines. Southwest created their culture from scratch. Now it must overcome the obstacles to make the combined business as good as Southwest is by itself. It has done it before on a smaller scale. Now it’s betting $1.4 billion that it can do it again. I personally hope they pull it off because I LUV Southwest. They understand making it easy for customers.
President & CEO, CoFounder
Scott Broetzmann has over thirty years’ experience in advising companies on how to invest limited customer experience dollars wisely to ensure happy customers and investment return.